Today: Stocks suffer as concerns about emerging markets lead to questions about the health of the global economy. Also: Juniper Networks shows off strong financials, but now has a second hedge fund agitating for change.
The Lead: Concerns about emerging markets send Wall Street down
Wall Street indexes plunged for a second consecutive day Friday, ending the worst week for the Dow Jones industrial average in nearly two years, as declines in emerging-market currencies spooked investors into a sell-off.
Slowing growth in China has sparked concerns about the economic health of the world's largest country, and foreign currencies such as the Turkish lira and the Argentine peso have suffered drastic declines. Funds that were deeply invested in foreign currencies or other elements of emerging markets dumped those holdings, and many funds rushed to sell stocks as well, either on concerns of declines or to cover losses suffered in their other gambits.
"We're seeing funds thinking, 'there's clearly some macro risk I hadn't considered,'" Wedbush Securities director of equity trading Ian Winer told The Wall Street Journal. "You'll sell stocks to bring down your overall exposure, so you'll protect yourself to play another day."
However, there are few buyers rushing to pick up those stocks, as investors wait to see if the bull market of 2014 is undergoing a correction that is just beginning.
"The response I'm getting from people who generally were 'buy on the dip'-type accounts is, 'We're looking at things a little differently now,'" David Seaburg, head of sales trading at Cowen & Co., told the Journal.
With many more sellers than buyers, all three of Wall Street's most prominent indexes declined 2 percent or more, with the Dow Jones falling lower than 16,000 for the first time this year, at the end of its worst week since May 2012.
Still, the blue-chip Dow and broad-based Standard & Poor's 5400 are not that far from record highs, nothing of grave concern if the past two days are a momentary blip on the radar screen. If bears are correct, however, a larger correction could be beginning as the Federal Reserve begins pulling down its monetary stimulus efforts -- which could affect the Fed's discussions about the policy at a meeting that begins next week.
"Given how poorly equity and currency markets have traded this week, Janet Yellen has the 'perfect excuse' to delay tapering at next week's Fed meeting," Tom di Galoma, co-head of fixed-income rates trading at ED&F Man Capital, told the Journal. "She is very careful about disruptions."
SV150 market report: Juniper jumps as other Silicon Valley stocks slide
The tech-heavy Nasdaq had the largest percentage decline of the day at 2.2 percent, and Silicon Valley tech stocks plunged even further, 2.3 percent, despite healthy gains for Juniper Networks and a handful of other Bay Area companies that announced earning Thursday.
Juniper jumped 6.6 percent to $27.72 after revealing quarterly results that beat expectations while facing a fight from hedge fund Elliott Management. Elliott has been pushing for Juniper to cut costs, and the Sunnyvale company's new CEO said in Thursday's conference call that they soon would announce "a detailed integrated operating plan, covering who is going to do what and when they are going to do it." While making the final touches on that plan, Juniper will have another activist hedge fund agitating for quick returns, as Jana Partners announced a significant stake in the company Friday. San Jose touch-screen technology company Synaptics also enjoyed strong growth after its earnings report, gaining 6.1 percent to $60.26, and Maxim Integrated rose 1.1 percent to $29.20 after releasing its quarterly results.
Elsewhere, however, declines were rampant. Apple (AAPL) fell 1.8 percent to $546.07 on the 30th anniversary of the Macintosh's debut, with CEO Tim Cook celebrating by sitting down for an interview with ABC. Google (GOOG) fell 3.1 percent to $1,123.83 while suffering a Gmail outage that sparked tumult on Twitter and fighting a court order to block access to an auto racing official's orgy pictures. Facebook fell 3.9 percent to $54.45 as COO Sheryl Sandberg's book took its first step toward becoming a movie, and Netflix's (NFLX) big week on Wall Street ended with a 0.7 percent decline to $386.08.
Up: Juniper, LinkedIn
Down: Splunk, SunPower (SPWRA), SolarCity, Yelp, AMD, NetApp, Facebook, Tesla, Yahoo (YHOO), SanDisk, Pandora, Google, Hewlett-Packard (HPQ), Adobe (ADBE), VMware, Salesforce, Intuit (INTU), Workday, Oracle (ORCL), Nvidia
The SV150 index of Silicon Valley's largest tech companies: Down 35.88, or 2.33 percent, to 1,502.09
The tech-heavy Nasdaq composite index: Down 90.7, or 2.15 percent, to 4,128.17
The blue chip Dow Jones industrial average: Down 318.24, or 1.96 percent, to 15,879.11
And the widely watched Standard & Poor's 500 index: Down 38.17, or 2.09 percent, to 1,790.29
Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/jowens510.